These commodity derivatives are traded on OTC market and NCDEX / MCX commodity exchange in India. No matter, what the future price will be, you’ll receive commodity as per the price mentioned in the commodity contract. We pay advance, get into a commodity derivative contract and ask supplier to delivery on a future date.īenefit of these contracts are you ensure delivery on a fixed date and also save your self from future price volatility. Below, I’m sharing Table 1.3 to know total Gross value added by commodity market in India.Ģ) Commodity Derivatives (Contracts): These are also referred as physical derivatives, these are buyer-seller agreements based on any commodity, when we need a commodity in future and we want to fix the price today. Only, Agro crop contribute 15 lac 30 thousand to GVA per year. We have 470 mandis in 14 states connect to National agricultural market (eNAM) across India. There are small commodity market and large commodity markets in India also referred as Mandi. This is 100% over the counter (OTC) This is the place where we normally go and buy in wholesale.

However, there are two types of commodity market:ġ) Physical commodity market: This market is also referred as spot market. Commodity market is commonly referred as physical commodity market in India for food, grain, metals and other items.

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